Baltic Dry Index. 981 +40 Brent Crude 74.43
Spot
Gold 2936 U S 2 Year Yield 4.19 -0.09
US
Federal Debt. 36.510 trillion.
Gold is
a treasure, and he who possesses it does all he wishes to in this world and
succeeds in helping souls into paradise.
Christopher
Columbus.
In the stock casinos, finally the return of reality?
Depending on the
outcome of Sunday’s general election in Germany, how bad will Europe’s stock
casinos fare next week?
Dow
drops 700 points for worst day of 2025 so far on new fears about economic
growth: Live updates
Updated
Fri, Feb 21 2025 4:46 PM EST
Stocks sold off on Friday as new U.S. data sparked
concern among investors over a slowing economy and sticky inflation, leading
them in search of safer assets.
Losses intensified into the close as traders feared
staying long into a weekend that could bring another barrage of headlines from
the Trump administration, which has proposed a flurry of tariffs and other
market-moving policy changes since taking charge a month ago.
The Dow
Jones Industrial Average lost 748.63 points, or 1.69%, to close at
43,428.02. Friday’s decline, its worst in the young year, brought its two-day
losses to roughly 1,200 points. The S&P 500 slid 1.71% to end
at 6,013.13, marking a second negative session after the index closed at a
record on Wednesday. The Nasdaq
Composite dropped 2.2%, settling at 19,524.01.
A volley of data raised new concerns about the
economy and sent investors into bonds, which caused yields to tumble. The University of Michigan consumer
sentiment index fell to 64.7 in February, a decline of nearly 10% and a steeper
drop than expected as consumers raised concerns about higher inflation
ahead from possible new tariffs. The five-year inflation outlook in the survey
was 3.5%, the highest since 1995. On top of that, existing home sales in the
U.S. fell more than expected last month to 4.08 million units. The U.S.
services purchasing managers’ index also dropped into contraction
territory for February, according to S&P Global.
Walmart shares
fell 2.5%, marking a second day of declines after the company issued a weaker-than-expected
forecast that also soured the outlook for the consumer and the
economy.
Prominent investor Steve Cohen shared
some negative comments on the market and economy from a conference in
Miami.
“It’s definitely a period where I think the best
gains have been had and [it] wouldn’t surprise me to see a significant
correction,” Cohen said, citing proposed tariffs dragging on the economy, as
well as some of the government’s cost-cutting efforts.
Investor favorites such as Nvidia and Palantir saw steep losses on
Friday as traders shifted toward traditionally safer assets. Procter & Gamble climbed
1.8%, while General Mills and Kraft Heinz advanced more than
3% each.
For the week, the S&P 500 slid about 1.7%, while
the Dow and Nasdaq both lost 2.5%.
“The top 20 performers in the S&P 500 today are
all from defensive sectors: consumer staples, utilities and healthcare,” said
Larry Tentarelli, chief technical strategist and founder of the Blue Chip Daily
Trend Report. “Investors often rotate into these so-called defensive sectors
when economic growth concerns appear.”
Stock
market news for Feb. 21, 2025
Steve
Cohen says tariffs and DOGE’s cuts are negative for economy, market correction
could be soon
Published
Fri, Feb 21 2025 2:39 PM EST Updated Fri, Feb 21 2025 3:40 PM EST
Billionaire investor Steve Cohen doubled down on his
negative view of the U.S. economy due to a backdrop of punitive tariffs,
immigration crackdown and federal spending cuts spearheaded by the so-called
Department of Government Efficiency.
The chairman and CEO of hedge fund Point72 said
he turned bearish for the first time in a while after President Donald Trump’s aggressive trade
policy made him worry about inflationary pressures and lower consumer spending.
Meanwhile, his tough stance on immigration could mean a constrained supply of
labor, he said.
“Tariffs cannot be positive, okay? I mean, it’s a
tax,” Cohen said Friday at the FII Priority Summit in Miami Beach, Florida. “On
top of that, we have slowing immigration, which means the labor force will not
grow as rapidly as … the last five years and so.”
The prominent hedge fund investor took a stab at
DOGE’s cost-cutting moves led by Elon
Musk, saying they could only hurt the economy more. Musk has said his goal
is to cut
federal spending by $2 trillion.
“When that money has been coursing through the
economy over many years, and now, potentially it will be reduced or stopped in
many ways, has got to be negative for the economy,” Cohen said.
Cohen believes a pullback in the stock market could
be likely given the uncertain macroeconomic environment. He sees the U.S.
economy’s growth slowing down to 1.5% from 2.5% in the second half of the
year.
“I think we’re seeing the regime shift a little bit.
It may only last a year or so, but it’s definitely a period where I think the
best gains have been had and wouldn’t surprise me to see a significant
correction,” Cohen said. “I don’t think it’s going to be a disaster.”
Steve
Cohen says tariffs, DOGE's cuts are negative for economy
In China news, will
DeepSeek start a new economic revival in China?
Beijing
embraces DeepSeek to lead AI adoption as it looks for new growth drivers
Published
Fri, Feb 21 2025 2:53 AM EST
DeepSeek’s
sudden splash in the large language model space has given China a powerful tool
to catalyze artificial-intelligence adoption in the country and boost economic
growth.
While
Goldman Sachs pegs a 20-basis-point to 30-basis-point boost to China’s GDP over
the long term — by 2030 — its expects the country’s economy to start reflecting
the positive impact of AI adoption from next year itself as AI-driven
automation improves productivity.
“The
recent emergence of DeepSeek ... suggests faster AI development and adoption in
China than we previously anticipated,” economists at the Wall Street bank said.
The
enthusiasm around DeepSeek is also being reflected in the sharp rally in China
stocks, with the MSCI China index soaring over 21% from its January low,
according to LSEG data.
The
startup’s rise is triggering a reassessment of China’s “investability” after an
extended period of limited attention, Morgan Stanley said in a note this week.
“DeepSeek
demonstrates that China is at or near the cutting edge of AI development, which
boosts the prestige of China’s economy and tech ecosystem, making them more
attractive for global investors,” said Gabriel Wildau, managing director at
Teneo.
The
company’s launch of a cheaper and more efficient AI model came as a timely
confidence boost as the Chinese leadership faces a prolonged economic gloom,
partly owed to the slump in its property market, while the specter of a fierce
trade war with the U.S. looms large.
DeepSeek’s
R-1 reasoning model has been lauded as being able to
match, or even outperform, leading global AI offerings amid claims of running
on cheaper and less sophisticated chips. The open-source model also can be
repurposed by developers outside the company to
significantly boost efficiency at a lower operating costs.
More
Beijing embraces
DeepSeek to lead AI adoption as it looks for new growth drivers
In other news, as
Germany heads for its general election (shock???) on Sunday, would the last
worker out at Mercedes and Volkswagen remember to turn off the lights.
Germany’s
Economy Faces Crisis as Auto Industry Struggles
20 February 2025
Germany’s economy, long driven by its powerful auto
industry, is now facing significant turmoil. Rising energy costs, labor
expenses, and increasing competition from China are placing intense pressure on
German automakers, dragging the country’s economy down with them.
A
Struggling Auto Industry
As reported by Digi24, German
automakers are dealing with a “perfect storm” of challenges. The transition
from combustion engines to electric vehicles has exposed weaknesses,
particularly in battery technology, where Germany lags behind global
competitors.
At the same time, demand for electric cars in Europe
is declining, while sales in China—previously a key market for German
manufacturers—have plummeted. In 2024, BMW sales in China dropped by 13%,
Mercedes-Benz by 7%, and Volkswagen by 10%.
Adding to these difficulties, U.S. President Donald
Trump has threatened tariffs on key German exports, including steel and
aluminum. Such measures could significantly impact Germany’s economy, which
relies heavily on exports.
Political
and Economic Fallout
The economic crisis is having a direct impact on
Germany’s political landscape. With elections approaching, Chancellor Olaf
Scholz is struggling in the polls, with his Social Democratic Party (SPD)
falling behind the opposition.
Meanwhile, far-right Alternative for Germany (AfD)
has gained momentum, fueled by public dissatisfaction with the economy.
German automakers have also been forced to cut
costs. Volkswagen recently proposed a 10% salary reduction and planned to shut
down three factories—moves that were reversed after pressure from labor unions.
The industry has also invested heavily in electric
vehicles, but the government’s sudden withdrawal of subsidies in late 2023
caused a sharp decline in sales.
As Germany enters its third consecutive year of
economic stagnation, the future of its automotive sector remains uncertain.
With mounting pressure from global competitors and shifting political dynamics,
the country faces a difficult road ahead.
Germany’s Economy Faces Crisis as Auto Industry Struggles
Mercedes-Benz
cuts costs, renews focus on combustion engine models in bid to revive earnings
20 February 2025
BERLIN (Reuters) - Mercedes-Benz on Thursday
announced further cost-cutting and more petrol and diesel cars than EVs in its
new product range, in a bid to revive margins as the company braces for a sharp
drop in earnings in 2025.
The German luxury carmaker will release 19 new
combustion engine models and 17 battery-electric cars by the end of 2027, in a
sign of a renewed focus on its combustion engine offering after its
battery-electric sales collapsed by a quarter last year.
Most of the new models will be in its top-end price
tier, showing that the carmaker is still committed to its strategy of selling a
lower volume of higher-margin vehicles, despite some investors and labour
representatives expressing concern in recent months that the strategy had
failed.
"The strategy of value over volume remains in
place - it has not been abandoned," CFO Harald Wilhelm said, adding it was
good news for its margin that combustion engine cars were still far outselling
electric vehicles.
The company's shares were down 1.5% at 1011 GMT, the
biggest faller on the blue chip euro STOXX 50E index, as some investors
expected more news on capital returns.
Mercedes-Benz' forecast will underscore investor
concerns about its ability to weather a tough global market, as German
carmakers' longstanding success exporting cars and deploying its technological
prowess are under threat from a more protectionist United States and Chinese EV
rivals.
"Luxury and China simply isn't working, and
both are vital to the Stuttgart-based car manufacturer's business success.
Management is not optimistic about the future either, with sales and profits
expected to be even weaker this year. Not to mention the threat of punitive
tariffs," said investment strategist Jürgen Molnar at brokerage
RoboMarkets.
More
Mercedes-Benz cuts costs, renews focus on combustion engine models in bid
to revive earnings
Italy
investigates Stellantis, Tesla, VW and BYD over EV consumer info
21 February 2025
MILAN (Reuters) -Italy's competition authority said
on Friday it was investigating BYD, Stellantis, Tesla and Volkswagen for
allegedly misleading consumers on the performance of their electric vehicles.
The investigations for possible unfair commercial
practices concern information "on EV driving range, battery capacity
degradation and limitations on standard battery warranties, potentially in
breach of the Consumer Code", the watchdog said in a statement.
Under Italian legislation, breaches of consumer
rights rules can lead to company fines ranging from 5,000 euros ($5,230) to 10
million euros.
Stellantis said in a statement it was fully
cooperating with the authority and had provided the necessary answers,
information and documentation.
"Stellantis... is convinced that it has
provided adequate, precise and exhaustive answers to the questions posed by the
officials," it said.
"Stellantis places the needs and satisfaction
of its customers at the centre of all its activities and believes that the
ongoing investigation will confirm this".
BYD and Volkswagen declined to comment on the
investigations. Tesla did not immediately respond to a request for comment.
According to the authority, the automakers' websites
offer "generic and sometimes contradictory information" on electric
car driving ranges, without clarifying which factors may impact the advertised
maximum range, and to what extent.
More
Italy investigates Stellantis, Tesla, VW and BYD over EV consumer info
Global
Inflation/Stagflation/Recession Watch.
Given our Magic Money
Tree central banksters and our spendthrift politicians, inflation/recession now needs an entire
section of its own.
'Stagflation'
fears haunt US markets despite Trump's pro-growth agenda
By Suzanne McGee and Davide
Barbuscia
February 20,
2025 6:21 AM GMT
(Reuters) -
Stubborn inflation and President Donald Trump's hard-line trade policies have
rekindled fears of stagflation, a worrying mix of sluggish growth and
relentless inflation that haunted the U.S. in the 1970s, even as markets remain
upbeat on his pro-growth agenda.
The potential
return of stagflation, which would pressure a range of assets, has been flagged
periodically over the past 50 years but not materialized as a real threat to
investor portfolios. While economists and portfolio managers are not ready to
say that this time is different, the dreaded scenario has crept back as a key
risk for investors in recent weeks, as the prospect of trade wars and punitive
tariffs cast a shadow over U.S. growth.
"Stagflation
has definitely re-emerged as a possibility because we have these policies that
could hurt consumer demand even while persistent inflation limits the Federal
Reserve's ability to maneuver," said Jack McIntyre, portfolio manager for Brandywine
Global's fixed income strategies. "It's not a zero-possibility scenario
any more, by a long shot."
A key piece of
the stagflation puzzle - inflation that refuses to cool down - lodged more
firmly into place earlier this month, when government data showed consumer
prices rose in January at their fastest monthly pace since August 2023,
bringing the annual rate of inflation to 3%.
The other piece
of the puzzle, U.S. economic growth, hangs in the balance, with Trump's tariffs
threatening to add inflationary pressure that could tip the scale.
"What
continues to concern us more than the risk of inflation is stagflation,"
said Tim Urbanowicz, chief investment strategist at Innovator Capital
Management. "There is that sticky base of inflation to contend with but on
top of that, tariffs have the potential to slow down the economy by becoming a
tax on consumers and weighing on profits and economic growth."
A Bank of
America survey of global fund managers on Tuesday showed the proportion of
investors expecting stagflation - defined by the bank as below-trend growth and
above-trend inflation - over the next year stood at a seven-month high. At the
same time, investors remained bullish on stocks, with a trade war seen as a
low-probability risk, the survey showed.
While Trump
postponed imposing new tariffs on imports from Canada and Mexico for a month at
the beginning of February, he has rolled out a new 10% levy on all Chinese
imports and announced tariffs on global steel and aluminum imports.
He has also
tasked his economics team with devising plans for reciprocal tariffs on every
country that taxes U.S. imports, and this week said he plans to introduce 25%
tariffs on autos, semiconductors and pharmaceutical imports.
More.
Analysis-'Stagflation' fears haunt US markets despite Trump's pro-growth
agenda
China says 'doing its best' to push for
tariff negotiations with EU
20 February 2025
BEIJING
(Reuters) - China has been "doing its best" to push for negotiations
with the European Union over its tariffs on Chinese-made electric vehicles, a
commerce ministry spokesperson said on Thursday, almost four months after the
punitive import curbs took effect.
The bloc voted
to increase the tariffs to as much as 45.3% in October after the European
Commission - which oversees EU trade policy - launched an anti-subsidy probe
into whether Chinese firms benefited from preferential grants and financing as
well as land, batteries and raw materials at below market prices.
"China has
been doing its best to push for negotiations with the EU," He Yadong said.
"It is hoped that the EU will take notice of the call from industry and
promote bilateral investment cooperation through dialogue and
consultation."
China launched
its own probes last year into imports of EU brandy, dairy and pork products.
He told
reporters China's anti-dumping probe into Europe's pork products and
anti-subsidy investigation into the 27-strong bloc's dairy trade were still
ongoing, when asked how the cases were progressing.
"We will
conduct the investigation in an open and transparent manner in accordance with
Chinese laws and regulations and World Trade Organization rules," he
added.
China's commerce
ministry in December decided to extend its anti-dumping investigation into EU
brandy imports by three months to April 5.
China says 'doing its best' to push for tariff negotiations with EU
Pressure on Rachel Reeves grows as tax
receipts disappoint
Friday 21
February 2025 7:30 am
Tax receipts
rose at a slower pace than expected in January, new figures show, in a sign
that the poor performance of the economy could have damaging fiscal consequences.
According
to figures from the Office for National Statistics (ONS), the government recorded a monthly surplus of £15.4bn,
meaning it received more in taxes than it spent.
But this fell
short of the £20.5bn surplus anticipated by experts at the Office for Budget
Responsibility (OBR).
“The undershoot
was largely driven by disappointing tax receipts, which were £4.6bn below the
OBR’s forecast, reflecting the recent weakness of the economy,” Alex Kerr, UK
economist at Capital Economics said.
The public
finances tend to be in surplus in January, due to the collection deadline for
self-assessed income taxes.
This was the
highest monthly surplus since monthly records began in 1993.
“While the
public finances are often in surplus in January, this year saw the biggest
monthly surplus on record, with high January self-assessment receipts
bolstering income,” Jessica Barnaby, deputy director for public sector finances
at the ONS said.
In the financial
year to date, borrowing hit £118.2bn, which was £11.6bn more than at the same
point last year and the fourth highest at this point in the year since records
began.
Despite the surplus,
the figures will pile further pressure on Chancellor Rachel Reeves, as they
suggest that the subdued economy has depressed tax receipts more than experts
expected.
This will make
it more difficult for Reeves to adhere to her key fiscal rule, which requires
tax receipts to fund day-to-day spending.
The Chancellor
left a buffer of just £9.9bn against her key fiscal rule in October, but many
experts think this has been wiped out by slow growth and higher borrowing
costs.
More
Pressure on Rachel Reeves grows as tax receipts disappoint
Covid-19
Corner
This section will
continue until it becomes unneeded.
How excess deaths in the COVID-19 pandemic impacted
Social Security
Daniel Ackerman Feb 19, 2025
The number of deaths from
the COVID-19 pandemic was so large that it ended up impacting the nation’s
Social Security fund — which had a net increase of $205 billion. That’s according to a study out
this week from the National Bureau of Economic Research.
The early days of the
COVID pandemic were scary — and for good reason, said Hanke Heun-Johnson, a
research scientist at USC Schaeffer Center for Health Policy and Economics.
“So we had a lot of
excess deaths — there were 1.7 million excess deaths during the pandemic,”
she said.
Heun-Johnson co-authored
the study and said many of those deaths were in people older than 65 “and were
drawing retirement benefits, or were going to withdraw retirement benefits, and
they had already paid into the system.”
They paid in but stopped
collecting when they died. All those uncollected funds added up. This isn’t the
first time a public health crisis has left an economic mark on the social
safety net, according to Gopi Shah Goda, director of the Retirement Security
Project at the Brookings Institution.
“There is actually an old study about how
smoking affects Social Security. Increased rates of smoking reduce the cost to the program, because
there are premature deaths associated with smoking,” she said.
While the COVID study
looked specifically at excess deaths, the pandemic impacted Social Security in
other ways too. Many people with long COVID drop out of the workforce, for
example, pointed out Goda.
“The labor force
participation rate directly influences the payroll taxes that are going into
Social Security, as well,” she said.
Overall, Goda said that
the $205 billion boost to Social Security won’t change much in the long term;
the government pays that amount in benefits every couple of months.
How Social Security was impacted by excess
COVID-19 deaths - Marketplace
Technology
Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Quantum simulation breakthrough will lead to 'discoveries
impossible in today's fastest supercomputers,' Google scientists claim
19 February 2025
Scientists at Google have revealed a new
method of "quantum simulation" that uses computing power to mimic the
behavior of a powerful quantum system. This approach, they argue, could lead
to quantum computers that can overtake supercomputers within five years and lead
to breakthroughs in drug discovery and battery
development.
Quantum simulation is a process in which
computers simulate physical processes and large quantum systems, such as
complex molecules. Essentially, engineers simulate physical processes that are
dominated by the effects of quantum physics.
But this is difficult to do with
classical computers because you have to model every particle's interaction with
every other particle. Because subatomic particles have a probability of being
in multiple states at once and can be entangled with each other, the complexity
of these calculations skyrockets quickly as you scale the number of particles
involved.
Instead, scientists are turning to quantum computers, whose behavior is already governed by the laws
of quantum mechanics, to solve the problems. Because quantum physics is built into the way
these systems work. If the qubits are
entangled or linked together the right way, they can mimic bigger quantum
systems without having to explicitly calculate every step in the evolution of
the system.
That is where "quantum
simulation" comes into play. There are two types of quantum simulation.
Digital simulation lets researchers selectively pivot between quantum states by
entangling and disentangling different qubit pairings (two entangled qubits) in
series. Analog simulation, meanwhile, is much faster. This involves entangling
all the qubits across a system at once — but since qubits can be error-prone,
this raises the risk that the output of the simulation becomes meaningless
noise.
The new approach to quantum simulation,
outlined Feb. 5 in a study published in the journal Nature, takes advantage of both these options
by blending digital and analog simulations into a single, multi-staged
approach.
Simulation theory
This "hybrid" approach begins
with a digital simulation layer, where scientists use the flexibility of the
system to prepare the initial quantum states of each qubit pair— choosing the
most pertinent position to start from. Next, the process switches to analog
simulation, which can evolve toward the specific quantum states the scientists
want to study.
Finally, the process switches back to a
digital simulation to fine-tune and probe the quantum states to solve the most
interesting problems in the physics being simulated.
The new research means that quantum
computers will likely outperform conventional supercomputers in practical
settings within the next five years, Hartmut Neven,
the founder and lead of Google Quantum AI, said in an emailed statement. The
time estimates vary greatly, with some suggesting this may be as far away as 20
years or achievable in the next couple.
Scientists have already demonstrated
that Google's quantum computing chips, including Sycamore and
the newly released Willow,
can outperform the most powerful supercomputers — but so far only in
benchmarking. To achieve supremacy in a practical scenario, the scientists said
they must make further improvements in calibration and control accuracy, as
well as improving the hardware. They also need to identify problems that both
can be solved by quantum simulation and are too complex to address using
classical computers.
More
Next, the
world global debt clock. Nations debts to GDP compared.
World Debt Clocks (usdebtclock.org)
This
weekend’s music diversion. More from young Mr. Fasch again. Approx. 6 minutes
Johann
Friedrich Fasch - Trumpet Concerto in D-major (Ca.1750)
Johann Friedrich
Fasch - Trumpet Concerto in D-major (Ca.1750)
This
weekend’s chess diversion. Approx 10
minutes.
Total
Collapse! || Magnus vs Hikaru || Chessable Masters (2025)
Total Collapse! ||
Magnus vs Hikaru || Chessable Masters (2025)
This weekend’s final diversion. The UK bans the Cybertruck. EU next. Approx 13 minutes.
NEWS:
UK Bans Cybertruck - 5 Fatal Design Flaws Tesla Can't Fix
NEWS: UK Bans
Cybertruck - 5 Fatal Design Flaws Tesla Can't Fix - YouTube
Commodities such as gold and silver have a world market that
transcends national borders, politics, religions, and race. A person may not
like someone else’s religion, but he’ll accept his gold.
Robert Kiyosaki.
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